Catherine BellEmpowering Women to Create Financial Freedom Through Passive Income, Real Estate, and Social Impact

Loan Deal Breakdown: Profit, Payments & 16% Return! #shorts

24 Jul 2026 · 1 min

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0:53

In this YouTube short, Catherine Bell walks through the financial mechanics of a seller‑financed real‑estate transaction. She outlines a $600,000 sale price with a $60,000 buyer down payment, leaving $540,000 financed by the seller. The buyer also pays off an existing $30,000 loan, resulting in a net cash‑to‑seller at closing of roughly $240,000. Using a 6% interest rate, the monthly seller payment is about $3,200. Over a five‑year term the buyer makes $194,000 in payments and then faces a $500,000 balloon payment, yielding total seller receipts of $456,000 after five years. This translates to a 16% cash‑on‑cash return on the seller’s capital, while the note’s true yield is 6%. The short succinctly demonstrates how seller financing can generate a higher cash‑on‑cash return compared to the nominal interest rate.

Chapters

That's why it's coming due in August right now. So here's the economics of it. Sale price, $600,000. Buyer down payment, $60,000. Seller finance, $540,000. They're paying off the $30,000 loan, which is then giving them a net cash at closing of $240,000. So interest rate at 60, and the 2A is 30, that'd be going down. So here's where we're at. So the monthly payment to the seller is going to be about $3,200. And then after the 5 years, they'll have a total of $194,000 with a 5-year balloon of $500,000, like that's their balloon back, right? So, cause we're going to get some amortization on it. So net seller receipts after 5 years is only $456,000. So what that does is it gives them a cash on cash on net cash tied up of 16%. Okay. So the 6% is their true note yield, then they'll have a 16%.